Thierry Stern, the CEO of Swiss luxury watchmaker Patek Philippe poses during an interview with AFP on the opening day of the watch fair Watches and Wonders Geneva, on April 8, 2024. The 2024 edition faced with slower demand in China for fancy Swiss timepieces and more timid consumer spending across the board on luxury items. The Watches and Wonders salon, which runs until April 15, will see 54 major watch brands show off their latest creations, including Rolex, Patek Philippe, Cartier, Chopard, Hermes, and Chanel. (Photo by Fabrice COFFRINI / AFP)
GENEVA, Switzerland — Patek Philippe’s chief says he is not anxious about the prospects for top-end timepieces, despite Swiss watch exports slowing overall after three years of spectacular growth.
Thierry Stern told AFP he was “not worried about the high end” of the market during the Geneva watch fair, which brings together 54 major brands at Swiss watchmaking’s landmark annual event.
For lower- and mid-range brands, “I think it must be tougher”, especially as there is “more competition” at those levels, Stern said at the Watches and Wonders salon, which opened on Tuesday and will run until Monday.
“But for Patek Philippe, I am not worried,” said the president of the brand which ranks among the most prestigious in Swiss watchmaking.
Decline in Feb exports
“Right now, I can’t think of a market in trouble — not at the top end, in any case,” Stern said.
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The United States for example, which accounts for 38 percent of Patek Philippe sales, remains a “collectors’ market” for the brand, he said.
“Europe is doing very well too,” he added, and if “Asia was a little tougher for a while”, then “today it’s back up again”.
Known for its complex timepieces, Patek Philippe is presenting a new version of its World Time model at the salon. It comes in white gold with an opaline blue-grey dial and a price tag of 65,000 Swiss francs ($71,400).
Swiss watchmaking had a brutal shock in 2020 as the COVID-19 pandemic hammered sales.
But the sector quickly rebounded, and broke records three years in a row, with exports reaching 26.7 billion Swiss francs ($29.5 billion) in 2023.
However, exports saw their first significant year-on-year decline in February — down 3.8 percent compared with February 2023.
That said, not all brands are feeling the effects.
‘A little calmer’
Globally, across the luxury goods sector, the top two percent of customers account for about 40 percent of sales, according to the US management consultants Bain & Company.
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Most high-end brands, like Patek Philippe, rely on a very wealthy clientele that is not particularly exposed to the vagaries of the economy — meaning those brands are well placed to withstand slower phases across the industry.
For Stern, the fourth generation of his family at the helm of Patek Philippe, the recent slowdown is perhaps a sign of “a return to reality” after three years in which watch sector sales “exploded”.
“We can’t say it’s a crisis,” it’s just “a little calmer”, he said.
This year, he intends to keep production at the same “record” level of 72,000 timepieces reached last year.
Established in 1839 and owned by the Stern family since 1932, the private company never reveals its turnover.
According to an estimate by the US bank Morgan Stanley and the consulting firm LuxeConsult, the company’s sales reached around 2.05 billion Swiss francs last year, up 14 percent on the previous year.